Furthermore, with Scotland’s income tax receipts growing more slowly than the rest of the UK, Scotland’s future fiscal sustainability could be at risk, say cross-party MSPs.

The findings are published today in the committee’s report on the Scottish Budget 2022-23. It follows evidence gathering sessions on the Scottish Government’s tax raising and spending proposals.

The Scottish Government’s Budget Bill begins its passage through Holyrood next week.

Kenneth Gibson MSP, Finance & Public Administration Committee convener, said the Scottish Government must rise to the challenges of the future by putting public finances on a sustainable trajectory.

However, he said that the committee suggests that “productivity, wage growth and labour market participation” should be a particular focus for the Scottish Government.

Mr Gibson said: “We consider that evidence showing Scotland is lagging behind almost all other areas of the rest of the UK in key indicators of economic performance is deeply worrying.

“We are particularly concerned to note the latest Scottish Fiscal Commission forecasts show Scotland’s income tax receipts falling behind the Block Grant Adjustment. If that comes to pass, it could put Scotland’s future fiscal sustainability at risk.

“We heard evidence from the government on its various initiatives to address trends affecting income tax receipts. This includes tackling Scotland’s underlying low earnings growth, labour force participation rates and productivity, as well as demographic challenges.”

He concluded: “We recognise that reversing these trends will not happen overnight and that the initiatives highlighted by the Cabinet Secretary are at an early stage.

“However, we are calling on the Scottish Government to outline how it could streamline and link up its various strategies more effectively.

“We reiterate our previous recommendation that the government considers how the National Performance Framework could be more closely linked to budget planning and seek its update.”